AgileThought, Inc. (AGIL) on Q4 2022 Results - Earnings Call Transcript
Operator: Ladies and gentlemen, thank you for standing by. Good afternoon, and welcome to the AgileThought Fourth Quarter and Full Year 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode . After today's presentation there will be an opportunity to ask questions. . Participants of this call are advice that the audio of this conference is being broadcast live over the internet and its also recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of call through May 10, 2023. I would now like to turn the conference over to Mariana Franco, the Company's Head of Investor Relations. Franco, please go ahead.
Mariana Franco: Good day and thank you joining AgileThought Fourth Quarter and Full Year 2022 Earnings Conference Call. Our speakers today are Manuel Senderos, Chairman and Chief Executive Officer; and Amit Singh, Chief Financial Officer. Before we begin, allow me to remind you that some of the comments on our call today, including our business and financial outlook, and the answers to some of your questions may be considered forward looking statements. Such statements are subject to the risks and uncertainties as described in the company's earnings release and other filings with the SEC. The content of this call contains the time sensitive information that is accurate only as of today, March 9, 2023. Except as required by law, AgileThought disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. Today's remarks will also include references to non-GAAP financial measures, such as adjusted income and adjusted net income which is how we track performance internally and the easiest way to compare AgileThought's to our peers in in the industry Additional information including reconciliation between non-GAAP financial information to the GAAP financial information is provided in the associated earnings press release. This conference call will be available to replay via webcast through AgileThought's Investor Relations website@ir.agilethought.com, where you can also find a copy of our earnings release. I'd now like to turn the call over to Manuel Senderos, our CEO.
Manuel Senderos: Thank you, Mariana and thank you all for joining us today. I am pleased to be here with you to talk about our fourth quarter and full year 2022 business and financial performance as well as our outlook for 2023. As we mentioned during our last earnings calls, we have been investing heavily across our sales, delivery and people functions, which together, we believe, will enable us to achieve industry-leading top line growth and margins. In sales, we have increased our head count by almost 50% in the last few months and with an even more increase in our selling capacity. We still have a few more higher spending but we strongly believe that as the new sales team members ramp up in the coming quarters, we should be able to materially accelerate our top line growth. We have also been encouraged by the quality of talent we have been able to attract from our -- from the leading multinational digital services firms. These new hires, along with our executive management team and the Board all see the clear pattern turnovers of industry leadership. In delivery, as we have discussed in the previous quarters, we have developed an industry-leading delivery model and strong technical and operational talent that can, along with our industry experts in the market units deliver to our clients the best consulting, design and software development services in the market. In the delivery function just as in sales, we continue to attract very strong talent from the leading digital services firms globally. For people function, a few months ago, we completely reconfigured our team with a strong focus on reducing attrition, building strong hiring capacity and creating robust value proposition for our employees to help them build a strong and fulfilling career path within our company. It gives me great pleasure to report that we ended the year 2022 at attrition levels, which were almost half of what they were at the beginning of the year. Currently, our attrition is at industry-leading levels. In addition, now our people function is in a position to hire strongly to fulfill the robust demand we expect in the coming quarters. While we expect this investment to show the real results in the second half of the year, we are already starting to witness the benefits, allowing us to close 2022 with a strong quarter. We reported a solid fourth quarter for 2022 with revenue totaling $43.1 million above our guidance, representing a 2.3% year-over-year growth. And with it, we totaled $176.8 million in revenue for the full year 2022 representing 11.5% organic year-over-year growth. A little color on our 2022 full year revenue growth. We have in the past, talked about two of our professional services vertical clients, which have been declining in revenues materially over the last two years due to the impact of COVID-19, strategic long-term business decision by our company and our ongoing efforts to remove non-core work from our portfolio. The two accounts together represented close to $50 million or almost 30% of our revenues, a couple of years ago and now represent below 10% of our revenues. Moreover, now our exposure with these two clients is completely digital, and we expect them both to stabilize and grow in revenues from here. If we exclude the revenues from these two clients in 2022, our overall organic revenue growth was 20% plus year-over-year in 2022. Healthcare and TPG retail were our fastest-growing verticals in 2022 with 49% and 21% year-over-year growth, respectively, and 8% sequential growth for the fourth quarter 2022. I am also excited to share that we made important improvements in profitability this year. Our gross margin for the full year 2022 was 32.6%, above our guidance range and representing a 340 basis point increase from the previous year. Our CFO, Amit Singh, we'll share more on this later on. We are frequently asked about the demand environment and whether we see it slowing down. The truth is the digital transformation market is still expected to continue growing and accelerating its growth. Fortune Business Insights recently released our updated the digital transformation market, where they projected to grow to $6.78 trillion by 2029. We also continue to experience a strong demand environment from our current clients, and I think staying close to the business and offering them the right solutions for their specific stage and need has made a difference. An example is a client in the healthcare industry, one of the largest insurance companies in the US who had information from its customers' wearables and was not sure how to leverage it best. By immersing ourselves in the client's business needs, goals and competitive landscape, we discovered together with them the best use of that information. We initially aggregated the Apple HealthKit and Google Health Connect data into AWS to make it available to the providers. This offers them a more complete patient profile with additional information to that observable during the examination. The access to the mentioned database will ultimately result in more accurate diagnosis and prescriptions, transforming them in stronger provider payer relationships and savings for our clients. Next, we will create a dashboard of the database to simplify the process and make it easier for providers to reach and manage the information which will increase its utilization. As with this client, we continue to strengthen the relationship with our existing customers in every vertical. While the majority of our revenue continues to come from our existing customers, we also continue to add new logos to our portfolio, strategically focusing on those clients who may become large relationships that can grow at scale. During the fourth quarter of 2022, we added three new logos to our portfolio, totaling 21 new logos for the full year 2022. We have talked about the investments, changes and additions made to prepare for our future growth. Now that all the pieces are in place, we want to reintroduce ourselves under a new fresh brand. I'm excited to share that we will be revealing our new brand soon, one that fully represents agile provision, purpose and spirit. We wanted to remind you all, that we don't just want to work. We want to focus on doing the right work, and we want to raise our clients' work to be above the rest. Let me give you an example of how we continuously help our clients to exceed expectations. One of our clients, which offers a platform that allows users to buy and sell fine art with cryptocurrency, needed help implemented its blockchain solution to make art ownership more accessible to the public and expand the market to more buyers. Together with our partner block spaces, we conducted agile blocks, a set of end-to-end blockchain advisory and development services. We started by determining the level of effort needed to build a blockchain solution and created a cutting-edge prototype of a solution that will allow buyers to buy a percentage of fine art and appreciate value over time. The prototype is passed by immutable blockchain technology to handle all triple currency deposits and withdrawals, which will create a permanent ledger of BR transaction. Additionally, AgileThought custom developed the front debt experience and the database to handle the majority of the platform's key functionality, creating user accounts, viewing art on the screen and even enabling border rights, which will give users the ability to vote on and agree to the true value of a piece of art. We plan to continue accompanying our client journey for an innovative long-term blockchain solution. According to IDC, cloud and knowledge permutations will continue to play an even greater role across the IT industry as enterprises pivot to a digital-first economy. As it is, and will continue to be key in their digital transformation journeys. During 2022, we started investing to strengthen our cloud and cybersecurity yield and continue accompanying our clients in the cloud transformation journey, while we cover all the key areas to assure its success, technology, people, processes and of course, business. We can discover the sign and finally deliver the best solution for each client, whether it is building a cloud-native application or migrating their current workloads to the cloud. IDC estimates that by 2025, 70% of enterprises will adopt cloud ones and transit networks to improve the availability, latency, performance, reliability, and scale of their cloud and niche applications and workloads. We are enabling our clients to turn to cloud as their future operating model and help them transform their business and the way they interact with their stakeholders. As I see the company grow, I am aware that for growth to be sustainable, we need to grow responsibly. We're always saying higher and the future is not the exception. For that reason, we will release our first ESG report and calls soon. In Nigel thought, we've always been committed to our people. The environment and the communities around us and integrity has always been part of our DNA. We understand that sitting down and watching will not make a difference. We need to write off for a better future. The report will present our vision and long-term goals and will bring together all the initiatives and ongoing project, allowing us to walk towards them rise up our ESC model is about our commitment to work towards becoming a net zero company, giving everyone equal opportunities to learn, grow and succeed in AgileThought. Paying it forward to the community and develop effective, accountable and transparent institutions at all levels. To do the right thing as we navigate all kinds of challenges and opportunities. Now, I will turn the call over to Amit Singh, our CFO, who will provide additional insights into our financial results.
Amit Singh: Thank you, Manuel, and good afternoon, everyone. Let me start by summarizing the results of our fourth quarter and full year 2022. I will then discuss our guidance for the next quarter and for the full year 2023. Revenues for the fourth quarter were $43.1 million, representing 2.3% year-over-year growth. For the full year, revenues totaled $176.8 million, above our guidance and representing 11.5% organic year-over-year growth. As Manuel mentioned earlier, this growth is 20% plus organic year-over-year, if we only exclude the revenues from two professional services clients that have been declining, but where we no longer see a big exposure. Now, on gross margins, during the fourth quarter of 2022, we delivered gross margins of 31.6%, representing 190 basis point improvements year-over-year. Gross margins for the full year 2022 were 32.6%, above our guidance range and representing an improvement of 340 basis points from the previous year. As a result of a strong collaboration between finance and operations, we have put in place a very robust deal governance process, which along with our ongoing exit for non-core revenues, should continue to help us improve gross margins year-over-year, while we still continue to make investments. Adjusted operating income for the fourth quarter of 2022 was $5.1 million, representing 11.8% adjusted operating margin, up from $0.4 million in the same period of 2021. Adjusted operating income for the full year 2022 was $11.4 million representing 6.4% adjusted operating margin and a 218% improvement year-over-year. Adjusted net income for the quarter totaled $1.6 million, representing 3.7% adjusted net income margin, up from a negative $2.1 million from the same quarter of the previous year. Adjusted net income for the full year 2022 was $2.7 million, representing 1.5% adjusted net income margin, 142% improvement year-over-year. Adjusted diluted EPS for the fourth quarter of 2022 was $0.03 based on 46.5 million average diluted shares for the quarter compared to a negative $0.05 for the same quarter of the previous year based on 42.4 million average diluted shares for the quarter. Adjusted diluted EPS for the full year 2022 was $0.06 based on 47 million average diluted shares. Moving on to the balance sheet. Our cash and cash equivalents as of December 31, 2022, and added up to $8.7 million. Every December, we have a material cash outflow event as by law, enterprises in Mexico are required to pay a Christmas bonus to the workforce based in Mexico. As you know, majority of our workforce is based in Mexico. During the fourth quarter of 2022, we spent around $2.5 million on this payment. Now let's talk about our outlook for the first quarter and full year 2020. We remain focused on executing revenue growth acceleration, and we'll continue working towards improving our profitability year-over-year. We will also continue to focus on strategically selecting the right customers and projects that help us deliver industry-leading growth and margins. Our successful efforts to exit the non-core business, as we announced a couple of quarters ago, should be completed in the first half of 2023, which along with the ramp-up of all the new sales team members should lead to strong revenue growth towards the second half of the year. For our first quarter of 2023, we expect organic revenues of at least $43.2 million. We expect full year 2023 revenues of at least $201.6 million or 14% organic year-over-year growth, with gross margins in the range of 33.5% to 34.5%. Thanks, everyone for participating in the call. I'd like to turn the call back to Manuel for any closing remarks.
Manuel Senderos: Thank you, Amit. In conclusion, we plan for 2023 to be the year where we integrate the investments as and changes made during the previous months showing revenue growth and increasing our margins. We expect to show continuous improvement in the coming years as we benefit from the strong digital transformation demand across the world. And with that, I'd like to turn the call over to the operator so that we can begin the question-and-answer session.
Operator: Thank you, Mr. Senderos. One moment please for the first question. We'll go first this afternoon to Mayank Tandon at Needham.
Mayank Tandon: Thank you. Good evening. Congrats, Manuel and Amit on a strong quarter and outlook. I wanted to start with your guidance for fiscal 2023, the 14%-plus growth that you're forecasting, which is fairly impressive in the midst of this certain macro. Could you maybe parse it out a little bit more in terms of what are the areas you're seeing strength in terms of verticals or services? And which areas would you call out as maybe seeing some incremental softness to give us a better feel for how the different areas are aligning for the year?
Manuel Senderos: Absolutely. Thanks for the question and participating. So we see very strong demand coming in from our healthcare industry and our financial services sector as well our industry. Both those have incremental growth within existing clients, which is significant, and we've seen that even from Q3 to Q4, and we are seeing that in Q1. We are investing heavily in increasing the sales team, specifically in those industries as well, because we see that demand coming in strongly. We don't have a lot of exposure into the technology industry, which is where others might see softness. So, although we are interested in participating in that industry for now, it's not a big chunk of our revenue. So we're not seeing softness in that area. But we are seeing good, healthy, strong demand in all of our other industries.
Mayank Tandon: That's helpful. And then just as a quick follow-up. I wanted to ask, maybe for Amit, as you think about the growth for the year, how do you square that with pricing trends, room for maybe expanding utilization and head count? How do those three factors play into your forecast for the year in terms of revenue growth?
Amit Singh: All right. So thank you for the question. As we move forward, obviously, we expect pricing trends to be at least in line with wage inflation and if not higher, as we are going through our overall process of exiting non-core work plus continuing to work with our existing clients to increase our overall pricing and driving gross margin improvement. So, we expect a strong pricing trend throughout the year. Utilization for us continues to remain in that mid 80-ish percent. I mean, obviously, from quarter-to-quarter is going to fluctuate, but we feel comfortable operating at that level, and I believe that makes sense. I think along with strong demand that we expect to be boosted by our increased sales force plus strong pricing, both in new work and existing work and then, an industry level utilization rate gives us confidence in the guidance that we provided for the full year.
Mayank Tandon: Great. Thank you for taking my questions.
Operator: Thank you. We'll go next now to Brian Kinstlinger at Alliance Global Partners.
Brian Kinstlinger: Great. Thanks so much for taking my questions. The first question is on visibility of revenue, at the mid and high-point of 2023 guidance. How much of the mid-point is coming from signed contracts or backlog, however you define it? And to reach the high end, is that a faster ramp of new programs already won, or does it depend more on new business trends over the next few months?
Amit Singh: So I would say the guidance that we have right now, the full year guidance that is strongly supported by our existing customers. So as you know, in our industry and -- with our company in the past, 90% of our revenues in any given year or around 90% of our revenues in any given year comes from existing customers. So the current guidance assumes a similar trend. But that being said, and like Manuel mentioned, we've increased our sales force by almost 50%. And as that sales force becomes effective or becomes by the middle of this year, we could possibly see more revenues from newer clients this year than in the past -- but -- and we'll update the street as we move forward in the year.
Brian Kinstlinger: Got it. That's helpful. And then my follow-up is, if you can touch on the progress you're making in recruiting in past years, quarters, it was an inhibitor to the top line growth. Is it still the case, or where are you with that progress?
A â Amit Singh: Yes, that's a great question, Brian. So as we've mentioned before, we've invested heavily in revamping that whole function, the whole people function actually. So over the last eight months, we practically changed the whole team and brought people especially leadership that has operated at much larger scale than we have. They themselves put in place different processes and change talent underneath them, implemented technology and implemented new ways of attracting people. So we see that already in the attrition coming down significantly but we also see that in the attractiveness of bringing people on board. So right now, as we sit here, we feel we have more than enough recruiting capacity for much larger demand than what we're forecasting. We purposely overbuilt the recruiting capacity and the people function, so that, that would not become a constraint for our growth. And that is where we felt confident now to really increase the size of our sales team by more than 50% because we felt that, that component was already solved for and now we could press on the accelerator and have that work fine.
Brian Kinstlinger: That's great to hear. I have one quick follow-up, if I could, on a number, just a quick number. I saw the filing for the first amendment -- sorry, the first lien, there's an amendment. I think you paid a fee in time. So can you tell us how many shares are outstanding as of today given those shares issued?
A â Amit Singh: So the paid in time fees gets added to the principal of the debt and that is towards the maturity of the debt. So there's no shares for that. It's an actual dollar amount, just increases the principle of the debt.
Brian Kinstlinger: Understood. Thanks for the clarification.
A â Amit Singh: Yes.
Mariana Franco: Thank you. We go next now to Joseph Vafi at Canaccord.
Joseph Vafi: Hi, guys. good afternoon. Just -- maybe we get the kind of real-time update on the exiting of some of the noncore clients I know we got some extra color on that now. Does that feel like it's on track on the schedule you were conveying before? Do you think that we're perhaps moving a little slower or a little faster on that? And then I have a couple of follow-ups.
A â Amit Singh: Sure. Thanks, for participating. So we do feel that it's on track. We feel good about the progress. I wanted to actually to share an example to make that more clear for everyone. So -- let me talk about one of our large accounts for Walmart. In Walmart, we used to have a long history with them working on different types of projects, but some of them had lower value added that we provided and consequently lower margins. So let's say, around 10% gross margin. But on the other side, we have a much, much larger opportunity with them, which we have just signed with 40-plus gross margins. So we allowed that low-margin business or low value-added business to run off, and we haven't renewed -- we didn't renew it with them. But at the same time, on the same month, we signed a 3x larger contract with them for high value-add services in the data space with them with the appropriate gross margin. So we think we're on track. We think that we'll continue to see those improvements come into their gross margin as we've already seen, but we'll see that accelerating, especially in the second half of the year. But we feel pretty good about making that decision -- and because our target gross margin is to end up at some point very close to 40. So we think we're on the right track, and we think we're making the right call in doing that.
Joseph Vafi: Okay. That's helpful. And then on mix, digital transformation projects are usually pretty unique. Are you seeing any opportunities to do more fixed price work in your newer book of business? And then also just was curious on the new brand a little bit what you're trying to convey with the new brand and the branding and what the strategy might be to roll that brand out? Thank you.
Manuel Senderos: Yeah, I can chime in on the brand part. So we're not changing the name or anything. We're just refreshing the brand to make it a more cooler technology type brand and just more adapt to the type of company where we have become. And every now and then, I think it's good to do a good refresh. We have a good internal team that does all of that for our clients. So we're using the opportunity to do it for us as well. So -- but you won't see a name change or anything. You just see something much cooler, I hope. And then, Amit, if you want to answer the other part of the question.
Amit Singh: Joe, if you don't mind just repeating what was the first question again, I lost some audio on that point.
Joseph Vafi: Yes. No worries, Amit. I was just wondering if you're seeing any opportunity to move any -- digital transformation is a little different than other services. But any opportunities to move up any kind of fixed price type component to your mix? Thanks.
Amit Singh: So we are definitely working a lot on outcome-based or pushing more and more outcome-based type of projects, where it's more about helping the clients drive their top line and have their -- and provide the right solutions for them to be competitive in their market rather than more focused on, call it, just a number of people and all of that. So we are seeing a lot of that change happening throughout our work. Obviously, all of this in the end, it's still priced more on time and materials. If you look at our results, the way we operate, it just shows a higher fixed price and that actually is more some regulations related because in Latin America, a lot of our projects by regulation need to be priced as fixed price. So even though they are structured as fixed price, they are put in sort of short time duration. So in reality, they act more like time and material, but for reporting purposes, they are more like fixed price. But beneath it all a lot more focused towards outcome-based and solution delivery. And that's the trend we are seeing.
Joseph Vafi: Great. And then maybe I'll just sneak one more in. I mean, the analysts here, we hear a lot about the macro, we hear a lot about the macro in the US. And I know you do have some business in Mexico and the rest of Latin America. Just wondering how clients in those geos are responding to the macro? Thank you, very much.
Amit Singh: Yes. It's been pretty interesting. We've been super disciplined in Latin America to focus on the global clients. So especially Latin America, I would say, they're real global large banks and some of the global retailers. And so we've seen pretty stable to growing demand in Latin America. A little bit on the FX for Mexico helps us on the revenue -- and then the effects in other countries helps us on the cost of the services we export into the US. But generally, the clients -- if we keep very disciplined on the right type of accounts, global accounts, we see the growth being pretty much on par of what we're seeing elsewhere.
Joseph Vafi: Thanks, Manuel. Thanks, Amit.
Operator: We'll go next now to Josh Siegler of Cantor Fitzgerald.
Josh Siegler: Yes, hi, good afternoon. Thanks for taking the call. So, year-to-date, has there been any shift in terms of the commentary from your clients in regards to how the macro is impacting demand for your services? And how do you expect existing client spend to change if the economy were to slow further? Thank you.
Manuel Senderos: Yes. I would say, again, from the type of industries that we participate in, we haven't seen a shift down to spend financial services, especially the large ones and health care, which are as well pretty large. They have a big backlog of digital transformation work that they need to accomplish just to become competitive and remain relevant. So we haven't seen that. We haven't seen any low. We've seen actually very good opportunities to open up in new accounts and the new large banks, where they are pushing harder on the digital transformation. Our Latin America delivery model has become more and more interesting for a lot of accounts as well, as the geopolitical tensions in Asia and even in Europe show that there's a lot of risk for them to have all of our things concentrated in one area. So Latin America, all of a sudden becomes a very interesting place for them to start growing their work. So we've seen that openness really heavily recently. I don't know if you guys have probably heard, but the like of Tesla, for example, is opening a new gigafactory in Mexico. So that type of mentality we are seeing elsewhere with other companies working on digital transformation, whereas before they would not think of doing things in North America that would go straight to Asia, maybe India or China. And now we see Latin America become very interesting for them. So it just makes our job a little bit easier.
Josh Siegler: Great. That's helpful color. And then, I was wondering if you could expand upon -- as you're ramping up headcount, do you also expect to see any impact from wage inflation in the last few years has been pretty high, as everyone is aware.
Manuel Senderos: But I think we're not really seeing that sign right now, but given how the tech industry has been evolving. Maybe we could see some tempering down or slowing down of the wage inflation. But that being said, in the past few years, when the wage inflation was high, we were also able to drive the higher pricing. So I think it goes very much hand-in-hand. But that being said, the overall demand for talent in our market, that always -- that remains sort of high. So this industry will always have some sort of a stronger wage inflation compared to sort of rest of the market.
Josh Siegler: Understood. Thanks for taking my questions.
Manuel Senderos: Thank you.
Operator: And we'll hear next now from Maggie Nolan of William Blair.
Maggie Nolan: Hi. Thank you and congrats. Great to see that revenue guidance out there for the next year here, thinking about that sales ramp, it's going to be a nice tailwind for you in the second half of the year. I'm curious, if those new additions are going to be close to fully ramped or productive at that time, or is this something that we could see, continue to be a tailwind into 2024?
Manuel Senderos: Yeah. I mean, -- first of all, thanks, Maggie, -- thanks for coming. Yeah. We onboarded most of that team early January of this year, so they will become productive and some of them are already becoming productive, by the second half, that's where we see the biggest push. We're already seeing it in pipeline buildup, a significant pipeline buildup and significant visibility into that second half. So we're pretty happy about that. And for sure, that will have a good tailwind into 2024 because we will have the full year benefit of that increased sales team. And as well, obviously, we will continue to hire at a slower pace, salespeople throughout each quarter as we meet certain thresholds, we have decided that we will continue to expand the sales team. So yes, we're really focused on driving accelerating growth.
Maggie Nolan: That's helpful. Thanks. And then, you just mentioned you're going to continue to invest there. So when you think about margin expansion. I know you're expecting gross margin expansion from your efforts in digital and the geo mix, but what about at the operating level? Are you able to drive some leverage there overtime? And what is your outlook for that?
Manuel Senderos: Yeah. I mean -- so again, Maggie, thank you very much for the question. So as you saw in the guidance, we're expecting strong gross margin improvement, and hopefully, we can do -- we can continue to drive that and the goal is on the gross margin side to get to closer to that 40% quickly. On SG&A because we have made investments towards the end of this year and especially at the beginning of this year, a lot of that getting sort of recognized at the beginning of this year. You still see year-over-year, SG&A as a percent of revenue improvement this year. But that being said, SG&A as a percent of revenue will still be mid, call it, mid-high-20%, but there is an opportunity to bring it down to closer to 20% very quickly, right? Also, as our overall delivery infrastructure, capacity infrastructure and sales infrastructure, all the core investments are now done, right? Now the investments from here are more linear to our growth. And this is where, along with size, you start driving efficiencies in SG&A. So our long-term goal is to bring that or hopefully, you know near-term goal in the next few years is to bring that SG&A as a percent of revenue closer and closer to that 20%, while we drive our gross margins to closer and closer to the 40%.
Maggie Nolan: Thanks, Amit. Thanks, Manuel.
Operator: And we'll go next now to Ernesto Gonzalez at Morgan Stanley.
Ernesto Gonzalez: Hi, Manuel, Amit, Mariana. Thank you so much for taking our question. It's one. Have you seen any shift in the type of projects that times are demanding, for example, more focused on cost efficiency projects? And does this have any impact on pricing and margins?
Amit Singh: Hi, Ernesto. Thanks for joining us. So no, we haven't seen projects on efficiency -- focused on efficiency. We believe we are playing with the right type of projects where we add high value added and more about the front office, more about making the customer more competitive about making them stand out. And that's where we're focusing our team and we're looking for problems to solve in that area. What we have seen, which is interesting is some companies in the US, which typically were doing most of the work onshore with a lot of scarcity in the talent pool and really high wages in the US that we've seen large companies at least two financial services companies come to us to shift a lot of that workforce into Latin America. But it is still focused on doing high-end work for the front part of the bank, but they are now open to moving and shifting what they traditionally have been done only in the US and now they're open to do it in Latin America. So you can call it maybe they are -- they will gain some cost efficiencies, but the nature of the project is a competitive advantage for the bank.
Ernesto Gonzalez:
.:
Operator: Thank you. And it appears we have no further questions this afternoon. Mr. Senderos, I'll turn things back to you for any closing comments.
Manuel Senderos: Well, thank you very much. So I really appreciate everybody participating and appreciate the questions and the time. I hope we answered most of them, and we were clear. So thanks, everyone.
Operator: Thank you, Mr. Senderos. Ladies and gentlemen, thank you, and thank you for joining the AgileThought fourth quarter and full year 2020 financial results conference call. I like thank you so much for joining us and wish you all a great remainder of your day. Bye-bye.
